Attorney's Unscrupulous Actions Lead to Sanctions

When an attorney engages in misconduct, a case can falter. When the misconduct is particularly egregious, a case can collapse, and Wade v. Soo Line Railroad is an extreme instance of this: a weak argument compounded and doomed by the reckless actions of a plaintiff's lawyer.

Michael Wade filed a routine workers' compensation suit in 2003 after he claimed to have injured his shoulder on the job when a hand brake malfunctioned, leading to a collision. Representing him was George Brugess, a Chicago-based attorney with Hoey & Farina who is experienced in railroad and Federal Employee Liability Act cases.

Then, as the U.S. District Court for the Northern District of Illinois noted, "this case took an unusual turn." Dan Mohan, a lawyer for Soo Line, noticed during a deposition that one of the files from Wade's doctor contained several memos detailing conversations that intimated Hoey & Farina made payments to the medical clinic. It also contained a note from a doctor stating he needed further instruction from Brugess after finding nothing wrong with his client. Mohan sent one of the doctor's assistants to make copies of the documents, and when the assistant returned, two or three of those documents were missing from the copies. The original documents also were missing from the file.

Later, when Mohan subpoenaed the doctor's office for the entire file, Brugess said he was too busy to review and forward the documents.

"I find Brugess's claims that he was too busy to review and send three pages worth of highly poignant documents utterly unconvincing," wrote District Judge James Zagel.

Meanwhile Mohan, a partner in Chicago's Daley & Mohan, was stunned. "This never happens," he says of the document situation. "Generally I would think it's pretty unusual."

Fleeing the Scene
When Zagel handed down his ruling in 2005, Wade no longer had a case--Zagel dismissed it as a sanction against Brugess for violating discovery rules. Zagel said that in any case, summary judgment for Soo Line was "almost a foregone conclusion" given the documents Mohan uncovered. He then ordered Brugess to pay all of Soo Line's attorneys' fees, which totaled $110,000. The judge's dismissal was an unusually harsh sanction, but one that wasn't completely unexpected.

"You can liken it to being in a car accident and then fleeing the scene, having your car repainted and hiding it in the garage," says Tom Wilkinson, a member in Cozen O'Connor's Philadelphia office. "On at least three occasions Brugess had an opportunity to rectify the situation and failed to do so. Under those circumstances, dismissal as a sanction may be appropriate."

Then, as if the case couldn't take any stranger twists, when it reached the 7th Circuit on appeal in 2006 Brugess took perhaps his most outrageous step since the case's outset.

In an Aug. 22 brief to the 7th Circuit, Brugess made the argument that under FRCP Rule 37, discovery sanctions can only apply to parties, not attorneys. Wade, Brugess said, should be made to pay the legal fees. His argument didn't go over well with the court.

"The rules of conduct clearly and explicitly set forth--and every attorney is quite well aware--that they are not permitted to take a position directly adverse to their current client," says John Fabian, an associate with McDonald Hopkins in Cleveland. "It's hard to imagine many more situations more directly adverse than this."

Conflict of Interest
The 7th Circuit agreed. In oral arguments, Judge Frank Easterbrook interrupted Brugess to ask why he was still representing Wade.

"Let me make it clear why I'm asking this question," Easterbrook said. "I do not understand how you can file an appeal, the result of which is to shift a very large monetary obligation ... off of your shoulders and onto your client's. It looks to me that you have an irreconcilable conflict of interest with Wade."

Clearly disturbed by Brugess' action, Easterbrook later wrote in his opinion, "Arguments designed to protect the attorney at the expense of the client are precisely the sort of acts that invite discipline. An attempt to defraud the court (and the defendant) by withholding vital documents has been compounded by an effort to make the client bear the consequences."

Easterbrook ordered not only Brugess but all of Wade's attorneys to show cause why the 7th Circuit shouldn't discipline them. And, in perhaps the biggest blow of all, Easterbrook referred all of the attorneys to the Attorney Registration and Disciplinary Commission of Illinois, where they could face disbarment.

"[The decision] is certainly a clear signal that one cannot either conceal important documents or attempt to lay the adverse consequences at the client's feet," Wilkinson says. "The conduct was appalling, and the outcome under the circumstances was not shocking--but the conduct was shocking."

Regardless of the strength of Wade's case at this point, Wade could now sue Brugess for mishandling his claim. And whether or not Brugess can fight off disbarment, in the eyes of corporate counsel his actions have further discredited plaintiffs' attorneys.

"In-house counsel generally are suspicious of plaintiffs' attorneys," says Mohan, who was once an in-house attorney for Chicago and North Western Transportation Co., which was acquired by Union Pacific Railroad in 1995. "To some extent there's some mistrust of the plaintiffs' bar in certain cases. In-house counsel might feel this verifies some of the feelings they sometimes have and that justice has been done in this particular case."